McGarryBowen Is No. 2 on the Ad Age Agency A-List

NEW YORK (AdAge.com) -- It's probably safe to say that Ivan Seidenberg, chairman-CEO of Verizon, doesn't come to the phone to talk about just any, for lack of a better term, vendor. That a chance to chat about McGarryBowen has rousted him, on the day when Verizon finally announced that it will carry Apple's iPhone no less, speaks volumes about McGarryBowen, the agency Verizon rehired last year after kicking it off the business in 2004.

"It's good to have an in-and-out relationship over the years," Mr. Seidenberg. "I've known John McGarry and Gordon Bowen for 25 years. But our deal has been the same. If you're the best we'll pick you, if you're not the best at that time, we'll go somewhere else. More often than not, they're the best. Right now, they're on a roll."

When McGarryBowen -- Ad Age's Agency of the Year in 2009 -- last year took a big chunk of Verizon business from McCann Erickson, worth at least a reported $30 million in revenue, it was the crest of an extended new-business run that included new clients Bud Light, Rustoleum, Advil, Chips Ahoy and 7UP. Those contributed to a growth rate in 2010 of 70%, no joke when you consider that annual revenue now approaches $120 million and headcount is more than 400, spread mainly between New York and Chicago offices, with a few more holding down a London outpost.

"They blend the old 1970s and '80s agency experience with new research techniques and young creatives," said Jim Trebilcock, the top marketer at Dr Pepper Snapple Group. In early 2010, he gave McGarryBowen a few brands including Sunkist and Canada Dry, and later in the year, deposited 7UP there, ending a long relationship with Y&R, Mr. McGarry's old stomping ground.

McGarryBowen was founded less than 10 years ago with agency-of-record duties on massive brands more than a little comfortable with Mr. McGarry's 35 years at Young & Rubicam (whose 1998 IPO made him rich) and the creative portfolio of Mr. Bowen that contains legendary ad work on clients such as American Express.

"They've mastered the art of the relationship," said Kraft CMO Mary Beth West. "It's truly a two-way collaborative journey. You always get the sense they're always thinking about the business. It's a wonderful feeling to know you're in it with someone who cares as much about the brand as you do."

Hailed by many, including Mr. Trebilcock, for its consumer research capabilities, McGarryBowen has a creative portfolio that lives not on the edge, but in the cozy mainstream where its brands want to be. But that work is effective and, importantly for an agency whose early reputation was built on anthemic TV spots, increasingly digitally savvy. The shop estimates digital now counts for between 20% and 30% of its revenue.

Its campaign for the second generation of Droid, the Android-based smartphone that McGarryBowen both named and launched in 2009, had a strong social-media component, including mysterious tweets about places where the phone could be found. That plus a heavy barrage of TV ads helped the Droid X sell out in 36 hours.

For Kraft, McGarryBowen helped make over Philadelphia Cream Cheese last year, by focusing on how the spread can be a cooking ingredient as well as a bagel topping. A new TV campaign and an online community where women could share recipes led to a 17% sales spike that's held at about 5%.

And the oil giant Chevron received a new campaign, "We Agree," that tried to right misperceptions about the oil industry. It ran into a road bump when The Yes Men, a prankster-activist group, hijacked the campaign, manufacturing a fake Chevron press release and AdAge.com news story. Helen Clark, corporate marketing manager, dismissed that hijacking as "noise" that didn't impact Chevron's "energy elite" target and praised the campaign.
Global clients like Chevron and Kraft -- combined with the footprint of Japanese parent Dentsu -- makes Mr. McGarry's international ambitions easy to see.

But Mr. McGarry is now 70 years old. Asked about succession, he rattles off a list of executives, including Mr. Bowen, chief operating officer Jonathan Buckley, and son, John, who runs the agency's digital operation and is known around the agency as "J3."

Asked about retirement, he laughs. "I had a two-year non-compete when I left Y&R."

"I had a pain in my head, a pain in my leg, a pain in my back. Since we've started this journey, I'm first one in the office, first one in the meeting, first one on the plane." Laughing again, he continues, "I think if anyone ever had a shot to live forever, it could possibly be me."